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Op-Ed: Our Profit-Centered Private Medical Industry Is Cutting Back on Hospital Care

The bean counters and management consultants have far less financial interest in letting patients into the hospital or staying there.
 
 
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With all the clamor over the website woes of the rollout of the Affordable Care Act finally ebbing, let's hope the media can begin to notice some changes in the delivery of health care that will have more far-reaching consequences for health care quality and access long after the sign-up problems are a distant memory.

Despite the hysteria on the right, some components of the ACA are clearly welcome, especially the Medicaid expansion in those states where the governors are not standing with pitchforks in the door to block health coverage for the working poor.

Yet there's plenty of trouble ahead, most evident with the cost shifting from insurers and providers to workers and families.

Many are now aware that the insurance plans offered through the exchanges are chock full of added out-of-pocket costs.

The cost problem extends well into the provider setting, as is now just being gleaned through some reporting on  price gouging by many big hospitals which jack up costs to patients through steeper co-pays, requiring cash up front before administering care, Medical Credit Scoring to determine if patients are a payment risk, and hounding patients for payment afterwards.

Less reported are the escalating problems on the care delivery side.

Let's start with a  new survey out from Citi Research, via Reuters, which reports that "hospital inpatient admissions in November fell to their weakest level in more than a decade."

Two big chains illustrate the trend. Henry Ford Health System in Detroit had a 6 percent drop the first seven months of this year, Modern Healthcare reported in August. California-based Kaiser Permanente has reduced its average daily census by 11 percent the past four years.

No one, of course, wants to be hospitalized. Sometimes you must be. A hospital is where you receive 24-hour nursing care, where they have the ability to quickly shift you to an operating room or intensive care floor if your condition suddenly deteriorates, and where they have the most specialized equipment.

But the hospital industry, increasingly dominated by giant corporations, either for-profit or acting like for-profits, are making higher profits elsewhere - in outpatient settings, especially surgery centers and boutique care centers, and investments, for example.

Hospitals overall, note NNU researchers at the Institute for Health and Socio-Economic Policy, have profit margins of 35 percent for elective outpatient services, compared to just 2 percent for inpatient care.

The bean counters and management consultants who, more than ever run the show, have far less financial interest in letting patients into the hospital or staying there.

Like those bad Halloween movies, the worst abuses long associated with managed care are back. Private health insurers, and hospital chains like Kaiser that are also insurers or hospitals that form their own integrated networks through the new Accountable Care Organizations (ACOs) have an economic incentive to restrict care.

For the past few months, registered nurses have been rallying and marching outside Kaiser Permanente facilities in Northern California protesting reductions in hospital services. These include broad cuts in hospital services that have sparked widespread opposition in  Manteca, Ca., and the closure of pediatric services in Hayward, Ca.

On a broader scale, Kaiser RNs are witnessing systemic practices aimed at setting up additional barriers to hospital care as fewer patients are admitted, held in "observation units" up to 24 hours and sent home, and pushed out the door prematurely to lesser-staffed, lesser-regulated sites or home.

In a 2012 Health Week presentation in Copenhagen, former Kaiser CEO George Halvorson  said that in the near future "for most people the home will be the primary site of care. In-home monitoring, EKGs, ultrasounds, blood and fluid diagnostic and patient communication tools will be increasingly sophisticated, effective and cheap."

 
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